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The Evolution of Augmented Reality

The Pokemon Go craze of 2016 catapulted augmented reality (AR) into the mainstream. Although it seemed like the latest technology when people worldwide were running around ‘catchin’ ‘em all,’ AR was actually invented in 1968.

Did you know that augmented reality already debuted in 1968?

From the first computer-generated graphics and projections in the sixties and seventies to the newest AR games and Microsoft HoloLens Developer Kit, the applications and possibilities around AR are constantly evolving. In 2016 total investment in augmented and virtual reality reached €925 Million and shows no signs of slowing down.

AR then and now

The beginning of AR can be traced back to 1968, when Ivan Sutherland developed the first head-mounted display system. Subsequent advancements in AR included applications in virtual fixtures for the Air Force and enhanced visual navigation tests for NASA. The term  ‘Augmented Reality’ wasn’t coined until 1990, by Boeing researcher Tom Caudell. AR and the internet finally joined forces in the early 2000s but it wasn’t until 2009, boosted by the smartphone revolution, that interest in the technology exploded. AR recently experienced a second resurgence thanks to the boom in smartwear technology.

More recently, thanks to the boom in smart wear technology, i.e. Google Glass or Magic Leap, a second resurgence happened, showing the world that AR is finally ready to fulfil its promise

Augmented Reality (AR) in business

Other than the ‘traditional’ use of AR technology in gaming, several new possibilities and advantages have popped up in other sectors like logistics, manufacturing, retail and much more. Any process or business activity that can be enhanced by visual overlay stands to benefit from AR.

Organisations are embracing the potential of AR. Boeing, for example, conducted an experiment in which a group of factory trainees used AR instructions to assemble an airplane wing. The results showed a 30% reduction in time and 90% improvement in accuracy. Similarly, DHL is piloting AR-enabled smartglasses to improve efficiency by 25% in one of its warehouses and is now investigating a broader rollout.

Augmented Reality on phone

Another sector enhancing the customer experience through AR technology is retail. Ikea has introduced virtual furniture, allowing customers to view Ikea products in their own kitchens and living rooms before buying. Lego is developing its so-called Digital Box where children can hold a virtual representation of their toy and discover the model from all angles by turning and shaping it with their hands.


The fragmentation of different operating systems, platforms and variations in hardware still make it difficult for bigger audiences to get a feel for AR technology. A single integrated platform where everyone can play, experiment and learn from each other will provide a big boost towards real AR enterprise applications.

Financial barriers

What will be the cost of implementation? What will be our return on investment? The financial side of the story is a second barrier for a lot of people. AR headsets nowadays cost between $1000 and $3000 and that is just a product price for consumers. For enterprises to adapt AR technology the financial impacts are far more advanced. What will be the impact on our business and our industry?

Technical barriers

Technology and standards in optics, 3D capabilities, motion tracking and CPU processors first need to evolve before AR can reach its full potential. 40 to 50 years ago computers were the size of a room and now we keep smartphones 1000 times more powerful in our pockets. The next step is to create a CPU 1000 times more powerful than smartphones into the frame of AR glasses to ensure the processing power, optical standards and 3D capabilities needed to enhance real physical data with a digital layer.

Content and education

AR technology is useless without content. Therefore AR solutions need to be build using tailor-made content to the environment, context and user. Authoring tools today are still complex and fragmented and need to evolve to make AR technology more accessible. For this it is important to build a strong pool of talent in the AR market to continuously develop and innovate new content and technologies.

Cultural and Privacy

AR technology will have big impact on our cultural properties and privacy. A lot of people are worried that with these devices everyone will be continuously monitored and tracked. Clear rules and regulations will need to set the frame in which these technologies can operate.

Though technologically, there are still some improvements that can be made, great progress will be visible in the next couple of years.

Soon customers will be trying on clothes in virtual dressing rooms, see personal advertisements and discounts at their favourite stores, read additional virtual information at historic sites or study in 3D to increase accuracy and efficiency. AR is already in use and will become even more part of our daily lives with a projected 200 million users by the end of 2018.

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Johan Van der Straeten

Johan Van der Straeten

Director, PwC Belgium

Tel: +32 474 48 47 55

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